rail ridership and revenue forecast results:...
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Rail Ridership and Revenue Forecast Results:
Southern California to Las VegasHigh Desert Corridor Joint Powers Authority
Transportation SolutionsSteer Davies Gleave
March 2, 2017
Study Sponsor: High Desert Corridor Joint Powers Authority
Formed in 2006 by San Bernardino and LA Counties
Purpose: to develop multipurpose corridor from Palmdale to Victorville, Apple Valley and Adelanto
Components – rail, highway, green energy
Key Stakeholders: San Bernardino County, SBCTA, LA County, LA Metro, CHSRA, CalSTA, Caltrans, Metrolink, SCAG, XpressWest, Cities
Primary Benefits of HSR on the Corridor
Congestion relief (with high speed rail) for one of the nation’s most congested corridor (LA/Las Vegas)
LA and LV metro areas connected by 2.5 hour HSR trip
Two hour trip savings – with safety, reliability, convenience
Will stimulate economic development in one of the fastest growing areas in California
Potential for significant private investment (P3)
Connectivity to state-wide and regional transportation networks
What does the SDG Revenue and Ridership Study tell us?
Size of the travel market between LA and Las Vegas
Current and future
Share of the market can HSR attract
How many riders (roundtrips) does this represent
Potential revenues based on realistic fare options
If phased build-out -- incremental ridership and revenues for each phase
Summary of Study Results Proven large scale demand between California and Las Vegas
Potential 27% market share for HSR
Forecast annual ridership of 3 million round-trips in 2021, rising to 11 million by 2035 with full corridor open, and 14 million by 2050
Forecast revenues based on competitive fares:
$600 million in 2025 (Palmdale to Las Vegas)
$800 million in 2029 (Burbank to Las Vegas)
$1 billion per year in in 2035 (LA/Anaheim to Las Vegas)
$1.6 billion per year in 2050
Study Consultant: Steer Davies Gleave
One of world’s largest fully independent transportation consulting firms
Over 30 years’ transportation sector experience
Established advisor in the passenger rail sector
Services include:
Project planning and development
Strategic and business planning
Economic impact assessment and cost/benefit analysis
Ridership and ticket revenue forecasting
Steer Davies Gleave: International ExperienceEurope:
Worldwide:
UK: The Economic Impact of High-Speed Rail UK: International Rail Services on the UK’s HS1 Line France: LGV Sud Europe Atlantique Italy: New High-Speed Open Access Operator Italy: High-Speed Rail Procurement Strategy in Italy Spain: AVE Madrid-Barcelona Business Plan Spain: Due Diligence Talgo Portugal: Ridership on New High-Speed Rail Lines in Portugal Cross-Europe: Madrid-Barcelona-France High-Speed Line Ridership Cross-Europe: Comparative Study of HSR for various countries Cross-Europe: North-West Europe Rail Capacity
Brazil: Sao Paulo – Rio HSR South Africa: Gautrain Ridership Forecasts Due Diligence Saudi Arabia: Makkah-Medina Rail Corridor Ridership Forecasting
& Operational Planning Saudi Arabia: Haramain High-Speed Rail
Steer Davies Gleave: US High-speed Rail Experience
SDG is a leading ridership and revenue forecasting firm for high-speed rail projects
What are “Investment Grade” Forecasts?
Revenue forecasts that explain and quantify uncertainties
Market recognizes as providing a sound basis for making an investment decision
Study provides full transparency of all assumptions, forecasting methodology, processes and final output
Uses recently primary observed data for all key components; and base analysis on parameters specific to the project
The Scale of the Existing Market for Travel to Las Vegas
Las Vegas attracted over 42.9 million visitors in 2016
Tourists
Convention and business visitors
Personal travel to visit friends and relatives
Californian residents approximate 29% of all visitors
Of these, 80-85% reside in Southern California
Many international visitors to Las Vegas also arrive via California
75% of international visitors don’t fly directly to Las Vegas
The Existing Travel Options
90% of visitors from Southern California travel to Las Vegas by road
Uncongested drive time from Southern California is 4-6 hours
Travel times at peak times (Friday northbound, Sunday southbound) are often significantly longer
Main alternative is travel by plane
From six major airports in Southern California
Phased Implementation
2021: Phase 1: Las Vegas-Palmdale
2026: Phase 2: Las Vegas-Burbank
2029: Phase 3: Las Vegas-Anaheim
2029: Phase 4: Connection with CaHSR services to Central Valley and Northern California
2021
2026
2029
Las V
egas
Vict
orvi
lle
Palm
dale
Burb
ank
LA U
nion
Anah
eim
The Forecasting Approach
Based upon a proven methodology, utilized in high-speed and intercity passenger rail studies in the US and internationally.
The size of the “in-scope” market for travel which HSR can serve
The future growth in this market
How much of this market HSR can capture at a given fare
How much additional travel will be “induced” by the presence of the HSR service itself
Ridership and revenue forecast
The Size of the “In-scope” Market for Travel Which HSR Can Serve
Estimated “in-scope” market includes approximately 26 million round-trips in 2015, based on:
LVCVA reported adult visitors to Las Vegas
Estimated visitation among under 21s and those visiting friends and relatives resident in Las Vegas
Estimated trips made by Clark County residents traveling to California
The Future Growth in this Market
Historically, growth of Las Vegas visitation strongly influenced by available rooms, with high occupancy levels
Forecasts of future year growth of “in-scope” market from California also incorporate:
Demographic changes
Behavioral changes (propensity to visit Las Vegas)
Primary Research Helps us to Inform Travel Behavior
Extensive cell-phone and GPS data used to understand where people are traveling to and from
10 focus groups were conducted across 5 locations throughout California to understand what is important to people when making travel choices
Stated preference surveys were conducted in multiple locations:
Yermo agricultural inspection station
MGM properties on the Las Vegas Strip
Las Vegas convention center
Online panel
Travel to station
Example of Survey Stated Preference Exercise
People’s responses help to quantify the potential capture by HSR
High Speed Rail
Travel in carTravel from station
Travel in high-speed train
Boarding at:
Round trip fare/person
2 h 45 min
2 h 30 min
Los Angeles
$115
5 h 30 min
5 h 00 min
Route:
Round trip cost/person
I-15
$ 70
Outboundtime
promo
Returntime
x x
Outboundtime
Returntime
How Much of the Potential Market Can HSR Capture at a Given Fare?
Binary choice models used to estimate likely allocation of different market segments to competing modes
Input parameters for models derived using data from stated preference surveys (with over 4,000 participants)
Estimates of additional travel “induced” by availability of the HSR service also developed based on survey responses
Base Case Ridership and Revenue Forecast
Forecast initial annual ridership of 3 million round-trips in 2021 (Phase 1, 1st year)
Demand increases to 11 million by 2035 with full corridor open, and 14 million by 2050
Potential 27% market share for HSR
Demand profile reflects infrastructure phasing and ramp-up
Wide range of sensitivity tests
Including exogenous factors, mode characteristics and model parameters
Demonstrates resilience of the forecasts
Ridership and Revenue Study Summary
Proven large scale demand between California and Las Vegas
Forecast annual ridership of 3 million round-trips in 2021, rising to 11 million by 2035 with full corridor open, and 14 million by 2050
Forecast annual revenue of $300 million in 2021, rising to $1.3 billion by 2035 with full corridor open, and $1.6 billion by 2050
Investment grade analysis based upon proven methodology used in the US and internationally
Forecasts developed using significant volumes of primary data collected specifically for this project
Forecasts subjected to a range of sensitivity tests which demonstrate the resilience of the forecasts across a range of areas of uncertainty
The Good News
Critically important project
Environmental work complete
Public Sector interest at Federal, State, Regional and Local levels
Ridership and Revenue Study completed
Private Sector interest
For Copies of Report
Contact: Neil PetersonTransportation Solutions
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Questions & Answers
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